The challenges of a sustainable economy

The urgency of the climate crisis has shifted the discussion on sustainability. Our economic model incentivizes growth and profit above all else, and we are starting to recognize that this cannot continue. Four out of five corporates have adopted a climate pledge, and almost all have some form of sustainability goals. 

Nevertheless, in practice when the goals of people and planet conflict with profits, profits tend to win. It is a fundamental problem with the incentives of the economic system that companies who make more profit are rewarded, and the consequences for missing sustainability targets pale in comparison to the consequences for missing financial targets. 

To that end, a number of different economic models have been proposed over the years that could better take sustainability goals into account. The Doughnut Economy, the Sharing Economy, the Steady-State Economy, the Circular Economy, and others have gained varying levels of interest but have had trouble gaining actual momentum in the market, because our traditional economic incentives are simple and powerful. The truth is that there are significant challenges to incorporating sustainability into our economic models:

Measuring sustainability: Sustainability is a multi-dimensional concept, and it's not always easy to quantify. Different models may use different metrics, and it can be tough to agree on how to measure progress.

Balancing economic growth with environmental and social considerations: Economic growth is important, but it can't come at the expense of the environment or society. Finding a balance between these competing interests is a major challenge.

Short-term vs long-term thinking: Many economic models focus on short-term gains and don't take into account the long-term consequences of economic activities on the environment and society.

Political and institutional barriers: Incorporating sustainability into economic models requires changes to existing laws, regulations, and policies, and these changes can be opposed by powerful interests.

Lack of data and knowledge: There is a lack of data and knowledge about the effectiveness of different policy measures, and the impact of economic activities on the environment and society.

Resistance to change: Incorporating sustainability into economic models requires changes to the way we currently produce and consume goods and services, and there may be resistance to these changes from consumers, businesses, and governments.

Global coordination and cooperation: Incorporating sustainability into economic models requires global coordination and cooperation, as many of the sustainability challenges we face are global in nature.

It's not easy, but addressing these is worth it. Incorporating sustainability into our economic models is essential for creating a more equitable and resilient global economy. And just like with the Internet, the more we learn about it and understand it, the more we'll see the potential for positive change.